Warren Buffet

OMAHA, Neb. (AP) -- Billionaire Warren Buffett has already said he thinks the U.S. economy is in a recession, and now he says the economy is getting worse.

Buffett told CNBC in a live interview Wednesday that all the data he sees from Berkshire Hathaway Inc. subsidiaries shows the economy weakening.

Everything connected with construction and with consumer, I see weakness, and if anything, it's accentuating a little bit."

Buffett also said he thinks inflation is picking up, especially in steel and oil, so it should be a concern for the Federal Reserve.

But Buffett said he would have been surprised if the Federal Reserve were to announce a rate cut Wednesday afternoon.

The Fed left rates unchanged.

"I think the Fed has to be careful not to do anything that signals that they regard inflation as a secondary goal and something they'll worry about later," he said.

Buffett also said he believes supply and demand, not market speculation, is what's driving oil prices to new heights.

Oil futures fell Wednesday after the Energy Department said the nation's supplies of fuel and oil were larger than expected last week, but prices remain above $130 a barrel.

Buffett said he disagrees with the idea that speculation was driving oil prices higher. At least nine bills proposing limits on that oil speculation have been introduced in Congress in recent weeks.

"In my adult lifetime, up until the last year or two, there's been a huge amount of excess supply available," Buffett said. "We don't have excess capacity in the world anymore, and that's why you're seeing these oil prices."

Buffett said he doesn't think it makes sense to impose a windfall tax on oil companies that have benefited from the high price of oil when other commodity prices have also increased. Steel, corn and soybean prices are all up significantly.

"I don't think any candidate in his right mind -- with the number of electoral votes in farm states -- would say that you ought to tax farmers specially because they're getting a windfall," Buffett said.

When asked about politics, Buffett said he doesn't think Democrat Barack Obama or Republican John McCain will have trouble raising money in the presidential race.

Buffett was backing both Obama and Hillary Rodham Clinton throughout the primaries, but since Clinton dropped out of the race, he has been supporting Obama.

"I think Barack is going to have plenty of money," he said.

Anyone Notice?

Anyone notice what is happening today? The strong sectors are all negative today and the weak sectors are all positive today. Why is this. Well they hope the FED will say something hawkish and this wil be the short term play in terms of bias, if not we go back to the same old bias. Notice how Oil and Gold are weak here!!!

Mid Day action

As expected the action is slow before the FED announcement @2PM.

Agro stocks being sold here for sure.

POT -7.50
MON -7.5
MOS -3.88
IPI -4.77
AGU -2.68

MON and the agros stock

MON just reported and the stock is dropping like a rock. Right here might be the catalyst for the pullback in the Ag stocks.
Look for the group to trade lower on this.
POT
AG
AGU
MOS
IPI
LNN

Market looks bouncey

Maybe wishful thinking or end of quarter mark up but stuff seem bouncey. If you are short I would be taking profits on short term stuff for a reset.

TRADE CALL :IPI

Taking off 1/2 of the 1/2 share left on IPI on a trade @$75 today..
That's a $25 gain or 50% gain on this 1/4 share.


ONLY WINNERS HERE !!!!!!!!!!

What if gas reaches $8 a gal

Well what would we really do if gas reaches $8-10 per gallon. It is a possibility we must think about as gas if now almost $4.50. Last week one long time investor in Oil, said we could reach $500 a barrel in 4-5 years and I am starting to believe that this is definitely an energy crisis happening.
I think Oil could reach $300 a barrel easily, yes easier than it going back to $75. The trend is definitely up and if we closely look at all the bullish factors, they far out number the bearish ones.

On to the market. We are shot here!! People seem to be giving up on the market and facing the reality slowly that the financials are DEAD. LEH looks like it wants to goto $10 in the finality of it all, Citibank has a chance to goto $10 too. I have been singing on Citibank for awhile that it should be a teenager stock from it was $27 and now it is firmly there. Citibank closed at $18.55 yesterday and I think we have just started to see serious selling in this name.

We look like we going to get a nice gap down which is the opposite of what I would ideally want. Therefore I will bracket the first hour to see where we want to go. Hard to say where we go before the FED announcement and I expect today after lunch into tomorrow announcement to be very low volume.